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Creating innovation processes that deliver value
Does your organisation have a defined innovation process or is it an ad-hoc process connected to new product development or the annual budgeting cycle?
Can anyone in the business innovate easily or is it considered the responsibility of a certain department or business unit (ie IT or product development)?
Is there a specific budget for innovation, or does responsibility for investment fall to a line manager who has justify it as part of their annual budget process?
Many companies fall at the extreme ends of these continuums as managers and senior executives continue to struggle with creating and measuring value from innovation.
In the hope that it will facilitate more robust innovation, some companies develop a specific process ‘that anyone can access’, however, unless your company already has a high-performance innovation culture, it is more likely to be a straightjacket than a value creating opportunity. Likewise, innovation through the annual budget cycle is likely to lead to genuinely new innovation hitting the cutting room floor because it is too risky.
So where is the balance? How can we create value from innovation without stifling it or just hoping that it will happen naturally?
Innovation requires space and accountability. The best place in your organisation to create space is within small business unit teams where the relationship between managers and employees is strongest. Despite this, left to their own devices, most business units won’t be able to facilitate innovation: hence the need for accountability.
The key to accountability is to shift the search for innovation away from ‘good ideas’ and toward core business challenges, and make managers accountable for finding them. This will also make measuring innovation value easier too.
Outlined below is a series of innovation principles that will help your organisation find balance. It can create space, provide flexibility, and most importantly, deliver value because it focuses on challenges rather than just ‘good ideas’. How your organisation uses these principles is up to you, and realistically, the first four could be unique to each business unit.
- Don’t stifle ‘early stage’ innovation by expecting businesses cases: the time spent developing the business case has more value getting people to start innovating
- Focus on problems & challenges: even things that appear to be opportunities like “enter new markets” are normally in response to a challenge such as declining market share, margins or changing customer requirements
- Understand the problem being solved, not the idea to solve it, and define a unique set of criteria for a good solution
- Create deadlines and scarcity: perfect solutions are not that helpful.
- Task your team to rapidly develop at least three ideas that meet the ‘good solution’ criteria and a way to test if the idea will work (ie in less than 2 weeks)
- Don’t attempt to get the whole organisation involved in everything: seek immediate feedback only from relevant parts of the organisation and if appropriate, external stakeholders (ie customers!) Ensuring these four principles underpin your innovation process will create an environment where new value can grow. Once ideas have been tested, additional resources may be necessary. In these situations, the next stage of your innovation process should be underpinned by the following principles.
- Use project management, with dedicated project managers, rather than line management
- Create temporary teams of 4-6 people from different functional areas
- Make available small amounts of resources based on a 1-page business case
- Set a maximum 90-day deadline that is driven by researching new ideas that meet the ‘good solution’ criteria, developing a new set of test parameters, and implementing a mini-pilot with the ‘customer’ (or end beneficiary of the innovation)
- Conduct a mini-pilot for more than one idea. For many companies, the biggest reason why they struggle with innovation is that they either don’t have a defined process, or alternatively, that process is too onerous.
- Creating a defined and simple innovation process that your line managers can implement within their own teams first will be easiest. Based on the outcomes, you can get more adventurous and spread out across the company.
About the Author Ross Maher is the director of Build21c, an innovation project planning and research company that helps companies innovate. His specialities include project definition and set up, and he believes the best innovation occurs through a conversation with customers, suppliers and other stakeholders.